MEXICO Law and Practice Contributed by: Fernando Todd, Jorge Garcia, Silvia Alanis and Ana Lilia Solano, Todd
posal of assets – ie, when a mining project is sold or transferred, any resulting capital gain is subject to income tax. Certain deductions and adjustments may be allowed in the calculation of capital gains that may influence the tax base. Foreign investors may be subject to specific tax rules, and the existence of treaties to avoid dou - ble taxation between Mexico and the investor’s home country may be relevant. These treaties may provide certain protections and impact the taxation of capital gains. 5. Mining Investment and Finance 5.1 Attracting Investment for Mining The presence of high-quality deposits improves project profitability and represents an excellent investment opportunity. Mexico ranks in the top 10 worldwide for 16 different minerals. Notably, it is the world’s leading producer of silver, sec - ond in fluorite production, and third in sodium sulphate. One of the key advantages of mining in Mexico is the enhanced efficiency of productivity and costs. This is largely due to lower prices for sup - plies and labour compared to many other coun - tries. Furthermore, Mexico has developed a robust supporting sector comprising suppliers with a significant capacity to efficiently provide the diverse goods and services required for mining operations. In 2023, the estimated investment in the Mexi - can mining sector reached USD5.211 billion.
According to the Mexican Social Security Insti - tute, as of December 2022, the mining and met - allurgical sector employed 417,380 workers. 5.2 Foreign Investment Restrictions and Approvals in the Exploration and Mining Sectors In Mexico, mining concessions may be granted only to Mexican nationals, Mexican companies, ejidos (land granted by the government to indi - viduals for agricultural and ranching purposes), agrarian communities, townships and indige - nous or Afro-Mexican peoples or communities. In the case of companies, they must be domi - ciled in Mexico, and their by-laws shall cover the exploration or exploitation of minerals and substances subject to the Mining Law. Foreign participation in the ownership of such compa - nies must comply with the Foreign Investment Law provisions, which currently do not impose any limitations on mining. 5.3 International Treaties Related to Exploration and Mining Mexico is committed to the development of the mining sector both nationally and internation - ally, recognising the impact of its participation in key multilateral and bilateral treaties in this field. These include: • The North American Free Trade Agreement: this was superseded by the United States- Mexico-Canada Agreement (USMCA, known as T-MEC in Mexico) in 2020. • The United Nations Framework Convention on Climate Change: Mexico is a signatory to this agreement, which addresses climate change issues – mining activities are therefore subject to regulations arising from interna - tional efforts to mitigate greenhouse gas emissions.
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